Optimize your warehouse flow

Automation can help ensure the fastest, smartest and most profitable strategies to move products out the door.

Tom Pollard

01/28/2016

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Manufacturing professionals continue to face growing challenges with the globalization of the industry, increased consumer demands and pressure from multiple stakeholders to ensure the fastest, smartest and most profitable strategies to move products out the door.

One area that offers a significant opportunity for continuous improvement is warehousing and distribution. SupplyChain24/7 notes that more than 50 percent of warehouse resources are typically involved in picking, packing and shipping outbound orders. However, warehousing is also one of the more complex components of material flow, so multiple factors must be considered to maintain accuracy, productivity and efficiency across operations.

When evaluating systems for both new and existing facility projects, it's no longer just a decision of what system fits the needs of the current manufacturing processes. Teams must work together to review specific priorities from different stakeholders, including: company ownership and manufacturing executives (employee safety, the company's bottom line and future growth); the accounting department (upfront investment, return on investment (ROI) and cost-savings); and the plant manager (productivity, accuracy and physical space).

Space within a manufacturing facility is limited and expensive, so the physical square footage that a storage and order fulfillment solution requires is a high priority in the design process. In addition, labor is the number one operating cost for a warehouse. Combined, these two considerations offer the greatest argument for investing in automation. The process of moving material throughout a warehouse includes multiple points that can individually affect the accuracy and efficiency of orders. Automation eliminates these potential problem areas by removing the opportunity for human error.

The changing market and consumer demand are also adding to the challenge of optimizing material flow. Traditional, single-distribution channels that shipped directly to retail outlets are being replaced by multichannel distribution strategies that unsuccessfully try to utilize unchanged infrastructures. With online and mobile ordering through e-commerce, consumers now have the freedom to order single products at their convenience, which increases the number and variety of SKUs necessary to fulfill orders. These changes require the implementation of different solutions that can ensure faster turnaround on fulfillment for direct-to-person shipping, direct store delivery (DSD) and centralized distribution.

For many reasons, most companies have not embraced automation in the warehouse, leaving time-consuming manual operations to fulfill changing distribution needs. According to the McKinsey Group, the price of automated labor compared to human labor has fallen by about 50 percent since 1990. Advancements in automation and robotic intelligence have also created numerous opportunities to enhance material handling operations within a facility. So, with automation, manufacturers can not only reduce labor costs, but can also improve ergonomic considerations for employees due to the ability for robotic systems to perform tasks and operations that are impossible or highly strenuous for humans.

Automation in use

Optimized material flow can require complex, automated material handling solutions that integrate robotic hardware, advanced software and manual operations. However, with strategic factory or warehouse layout designs, intelligent software, and innovative robotic solutions, these systems can be simplified and streamlined to get more out of less. Oftentimes, fewer components actually result in increased efficiency, improved use of physical space and cost savings.

A good example of a streamlined system is an automated layer pick system. These solutions provide an appealing alternative to traditional order picking. Products from production or receiving are delivered to the automated layer picking robot, which works from overhead to store products and pick orders for the loading docks. A sophisticated combination vacuum- and-clamp gripper enables the robot to carry just about anything, regardless of its packaging. The robot covers an area of virtually any size with a staging area under the gantry that includes a pallet of every SKU the company offers. A warehouse control system (WCS) enables the system to communicate with the existing warehouse management system (WMS) and obtain order information. Once the order is built, it is moved to the loading dock and prepared for delivery.

The same system can be used to replenish high-density carton flow racking where workers manually pick individual products for orders using traditional voice pick or pick to light. Keeping only the amount of product necessary for upcoming orders in close proximity eliminates the need for workers to travel long distances around the warehouse, increases productivity and saves space in the facility. Leading manufacturers are investing in automated layer pick systems to employ just-in-time order picking, increase efficiency, reduce labor costs, eliminate errors and ensure traceability as products move throughout the facility. Data gathered about material flow processes, order picking efficiency and productivity can be analyzed and used to identify opportunities to further improve overall operations based on hard facts.

L'Oréal Paris

L'Oréal Paris, a global manufacturer of personal health and beauty products, implemented an automated layer pick system that provides a throughput of 190 layers per hour. Each layer consists of roughly 30 cases, for a net average throughput of 5,700 cases per hour. Comparatively, in a manual picking operation, each person can realistically pick 90 to 250 cases per hour, based on any number of factors within a facility, including the type of warehouse, distance between staging areas, and more. In this scenario, the average manual picking rate was 200 cases per hour per person. The layer pick system, with only two robotic heads, does the equivalent picking of 25 to 30 people per shift, allowing management to reallot resources to focus on other non-automated tasks.

The automated system provides this health and beauty manufacturer with additional labor savings by stretch wrapping and labeling each order pallet. Order pallets can also be built in a specific sequence to enable direct-to-truck loading for just-in-time order picking and distribution practices. In total, this simple layer pick system provides an estimated return of nearly $2 million per year. Not only is that a significant, direct impact on the company's bottom line, but it also offers a quick ROI —both key considerations for executives and the accounting department.

Brewers Distributor Limited

Similarly, Brewers Distributor Limited (BDL), a Canadian company that focuses on the wholesale distribution of beer and the collection of returnable, refillable and recyclable beer containers, installed an order fulfillment system that ships 56,000- 137,000 cases per day to any of its 3,500 customers. The system, installed in a 450,000-square-foot facility, required only two-thirds the amount of physical space as the manual system and consists of four robotic heads on two gantry frames that pick both layers and individual cases of bottles and cans, full kegs and promotional items. Products are then moved to conveyors to build rainbow pallets for distribution. Once the pallets are complete, they are released and merged onto the pallet conveyor system for labeling, stretch-wrapping and check-weighing.

The system also keeps 16,000 pallets in storage and picks 300 SKUs concurrently during round-the-clock operations. With 100 percent picking accuracy and improved product traceability, as well as increased throughput capacity and turnaround time for replenishment, the company can show a direct positive impact on many of the top priorities of its stakeholders, like the compa ny's bottom line, cost savings and efficient use of physical space.

Sometimes, manufacturers worry that the types of packaging or containers for their products can have an impact on the ability to install an automated system. However, as technology advances, solutions are being created to pick a wide variety of products, regardless of how they are packaged.

Kroger

One of the world's largest grocery retailers, The Kroger Company (Kroger) (NYSE:KR), built a brand-new, state-ofthe- art, fully automated fluid milk plant—one of the first dairies in the U.S. to deploy robotic technology that enables packing, picking and palletizing of crates in the cold storage areas entirely by automation. Not only does the system reduce the reliance on human involvement, which minimizes the workers' exposure to work-related strain, but it also meets the company's high standards for energy-efficient and green initiatives.

The 215,000-square-foot facility processes fresh conventional and organic milk in half-gallon and gallon containers and packages aseptically processed milk, creams and juices in quart-sized and smaller bottles. The new, fully automated, robotic production storage, handling and order processing system includes a warehouse management system (WMS), robotic gantries, software modules and an inter-platform communications system. It handles stacks of and individual plastic dairy cases on non-traditional, knee-high, plastic belt conveyors that allow the cases and/or stacks to be picked according to the company's specified sequence. Once picked, the products are palletized and immediately loaded on the trucks in route-stop sequence.

This end-to-end solution services more than 160 stores across two states, provides rapid material handling, ensures flexible use of space and improves labor savings. It also facilitates the collection of detailed product data, which can be used in dispatch operations and production planning. This data provides the company with 100-percent traceability, an important factor for perishable dairy products and consumer safety.

Omni-channel challenges

With the rise of e-commerce and the increase in consumers' demand for the products they want, when they want them, retailers must create omni-channel strategies that seamlessly integrate online and brick-and-mortar entities throughout the supply chain.

Accommodating these new demands and strategies requires manufacturers to turn to technology and automation to augment current operations, while also identifying opportunities for continuous improvement. The transition from picking large quantities of product to picking individual items can be time-consuming and inefficient. The use of automated storage and picking systems can alleviate this disconnect.

Automated systems can be programmed to identify and execute the most effective path to picking an order, eliminating the need for individuals to walk long aisles across the warehouse for various items. An automated system for the goods-toperson market should be able to accommodate a large number of SKUs, whether handled in plastic crates, containers, trays, totes or bins. High efficiency and accuracy of the system are key to ensuring effective productivity levels and unmatched customer satisfaction. By integrating an innovative shuttle device to store and retrieve goods, these systems are cost and space efficient and allow warehouses to retrieve any product in a storage area with one fast movement.

In addition, automated systems acquire data throughout the picking and packing process. Using historical data such as the number of orders fulfilled or the amount of a specific SKU packed will help management make data-based decisions to improve productivity and predict volume spikes. Looking at orders in real time also helps to optimize efficiency by shuffling the orders to find the most efficient picking routes.

On a larger scale, automated systems are able to consider all aspects of getting the product from the warehouse to the customer in order to maximize overall efficiency for the whole process. For example, automated order picking systems can enable order pallets to be stacked higher—to the limits of the truck, instead of the limits of a human's reach—making deliveries more efficient. Automated order picking can also save money on shipping costs.

Looking ahead

Consumer preferences will continue to change, as will manufacturing best practices and the entire supply chain landscape. However, there will always be a need to remain competitive, address concerns of key stakeholders and find new ways to meet consumer demands. With flexible technology solutions, manufacturers can ensure these priorities will be met and get ahead of the curve with systems that easily scale based on the needs of their organization.

While many hesitate to embrace advanced technology such as automation, due to factors such as reliability, job security and costly investments, benefits of a proven solution can outweigh any initial concerns through increased efficiency, fast ROI and overall employee and consumer satisfaction.

Tom Pollard is an applications engineer for Cimcorp. This article was originally published on AME Target Magazine. Get access to the magazine using the Target App. AME is a CFE Media content partner. Edited by Erin Dunne, production coordinator, edunne@cfemedia.com.

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